Transcript
Page 1: Rewired: Evolving Mindsets · 1. “100 Practical Ways to Improve Customer Experience; Achieve end-to-end customer engagement in a multichannel world” by Martin Newman with Malcolm

Rewired: Evolving Mindsets

The OE JournalOrganisation Effectiveness Cambridge

Number 17 ISSUE 1 2019ISSN 2049-6478

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Contents

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Mindset: a Lever for Changeby Gary Ashton

All organisations have a ‘dominant logic’; a way of looking at the world that is hard-wired into the business. But if the organisation needs to change (for example to become more customer focused), how do they shift this mindset? Gary Ashton explains why introducing a CCO to the top team is a good �rst step to becoming customer-centric, but it’s not the whole story...

Harnessing Diverse Mindsets: the Challenges and the Opportunitiesby Dr. Hazel McLaughlin

How can leaders harness the strengths of diverse teams to gain a competitive edge? Hazel McLaughlin explains how organisations can avoid the dangers of groupthink and embrace diversity in all its forms.

The Agile Leader: Developing an Agile Mindsetby Toni Marshall

Mindset plays an important role in developing an Agile Leadership style as it is a fundamental enabler (or blocker) of behavioural change. Toni Marshall introduces OE Cam’s model for Agile Leadership and shares some of the ways in which OE Cam can help embed agile behaviours.

Using Communication and Engagement to Nudge ‘Risk’ Mindsetby Julie Brophy

How do you encourage employees to be braver? Agile leaders need to let go of command and control techniques and create a culture of continuous learning where fast failure is acceptable. Julie Brophy explores how communications and engagement can be used to change mindset and build an appetite for risk.

Force of Habitby Mariam Mirza

Why is it important to set habits and how can leadership development programmes use knowledge of the habit loop to support changes in employee behaviour? Mariam Mirza reveals the practical steps involved in creating workplace habits that last.

OE Cam LLP

3 Wellington Court,Cambridge

CB1 1HZUK

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www.oecam.com

+44 (0)1223 269 009

Number 17 Issue 1 2019ISSN 2049-6478

Editor: Helen PybusEditorial Consultant: Gary Ashton

Design: Urban PicnicIllustrations: Rob Hill

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Rewired: Evolving Mindsets

Editorial

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OE Cam De l iver ing Organisat ion Ef fect iveness

Welcome to this edition of The OE. ‘Mindset’ is a �rmly established set of thoughts, attitudes and beliefs held by a person or group. It is a lens through which we perceive the world and therefore drives actions and behaviours.

As specialists in behaviour change, when clients say ‘we want to be more commercial’ or ‘we need to be more customer-centric’, we �rst help them to build an awareness of mindset - as this is a fundamental driver (or blocker) of behavioural change. At the most basic level, we explore the extent to which the individuals (or team) have more of a growth or �xed mindset (1). We can then look at what kind of mindset the organisation needs to succeed and what are the best levers for to deliver change.

This edition of The OE is about evolving mindsets. Interestingly, the whole organisation will have a ‘dominant logic’ so we start there, and our �rst article reveals a number of levers open to the CEO to change the way in which the business is hard-wired. We then look at three of these levers in turn; how do you harness a more diverse mindset? How can you reframe your attitude to risk to build customer-centricity? and how can you use knowledge of the habit loop and nudge theories to shift employee behaviour?

Finally, we look at what makes an Agile Leader. The ability to adapt, to continuously learn and fail fast are pillars of a growth mindset and underpin so much of the behaviour that is important today.

We hope you �nd this edition of interest and, as ever, please do let us know what you think.

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1. “Mindset: The New Psychology of Success” by Carol Dweck, 2007

MARTYN SAKOLManaging Partner

Your beliefs become your thoughts, your thoughts become your words, your words become your actions, your actions become your habits, your habits become

your values, your values become your destiny.Mahatma Gandhi

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by GARY ASHTON

2 I ssue 1 2019 Rewired: Evolving Mindsets

Mindset: a Lever for Change

Is mindset holding you back? Sometimes businesses get stuck. They just cannot get themselves out of a way of thinking that prevents them from considering alternative options - even when they are staring them in the face. A ‘dominant logic’ runs through an organisation; no matter how clever the people, they seem to be hard-wired into a certain way of thinking.

On the high street, think about names such as House of Fraser, Debenhams and Superdry. It has been suggested that these organisations need a shift in mindset, a change in how they see and evaluate the world. Others have made that shift, such as Argos and The Body Shop, and are starting to reap the bene�ts. But making the shift is easier said than done.

But it can be done. Take Argos, hit by the �nancial crisis and the emergence of digital retailers, its growth strategy was not delivering and they seemed to have got themselves into a rut. However, the arrival of a new CEO, John Walden drove a change in organisational mindset to become a business of "technology with a human touch" - a technology driven company, with 1,000 locations across the UK where you could interact with a human. That thinking required a signi�cant change in how the leadership looked at the world, how it engaged the senior managers in developing a new blueprint and bringing in new capabilities to develop the new vision of Argos.

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How to change a whole organisation’s mindset? Sometimes the dominant logic is so strong as to what guides people’s motivations and decisions, that it takes a lot of e�ort to change. One important lever that a CEO can pull to change mindset and focus, is to recon�gure the executive team. And an example of this in recent times has been the establishment of the Chief Customer O�cer (CCO). Customer-centricity is the order of the day and the CCO gives the customer a seat at the executive table. The CCO has accountability for putting the customer at the heart of the value proposition and delivering a seamless, multi-channel customer journey.

Developing a Customer MindsetBut what does it actually mean to create a Chief Customer O�cer? or others such as Chief Experience O�cer (CXO)? Is this just a shu�e of the seats around the top table? Or is it something more profound?

In our experience, we have seen both versions. For some, the change is more cosmetic with simply a change in job title but no signi�cant change in behaviour, whereas for others there is a true shift in what we call “primacy” in the business, which generates a meaningful shift in mindset and consequently behaviours.

A Shift in PrimacyA shift in primacy is when there is a change in where the power lies in the organisation. Primacy identi�es the part of the organisation that “calls the shots” and provides the momentum for others to follow.

In an earlier OE journal “Getting Even Closer To The Customer”, we explored the unintended consequences of a power shift in the executive team to become more customer-centric, as sometimes it can mean a dislocation of the power relationships around the table.

To change primacy in an organisation, you �rst need collective acknowledgement by the Executive that it is the right thing to do for the business. Success will depend upon the maturity of the team and the quality of their relationships; the credibility of the individual who is bestowed the additional authority, and how that authority is used.

But note, that the successful Chief Customer O�cer does not have unilateral power. Rather, they are required to confer with interested parties and gain their commitment to the decisions made. They must be able to in�uence; to persuade and convince others of how to look at and think about the world through their particular lens, and how the organisation should move. Hazel McLaughlin covers more about harnessing diverse mindsets and the importance of avoiding group think in her article on page 6.

Continued overleaf...

A ‘dominant logic’ runs through an organisation; no matter how clever the people, they seem to be hard-wired in to a certain way of thinking.

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MINDSET: A LEVER FOR CHANGE

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Successful CCOs are not blinded by the technological developments required to deliver the value proposition in a multichannel world, but instead keep the technology as the servant of the customer. As Martin Newman said in his book “100 Practical Ways to Improve Customer Experience” (1):

“I keep hearing the term “digital transformation”. Maybe that’s the answer? No, it’s a misnomer. Digital is technology. It’s the conduit and enabler to delivering the appropriate customer experience. It’s not the starting point. It should really be called customer-centric transformation, as that would then set the agenda for leveraging technology to put the customer �rst”.

Making the Energy Switch with CareA shift in mindset through a shift in primacy means in e�ect, a redirection of the corporate energy of the business, which can unleash either a positive or destructive energy, or just plain sap the energy out of the business.

I have seen this with one business that acquired a competitor. By keeping the businesses separate, and investing the power of its two Managing Directors, instead of creating a constructive, healthy competitive environment, the two businesses battled against each other, even more vehemently than when they were external competitors.

To address this, an era of integration was introduced, creating a new business model with the power vested in the functions, whereby the marketing, buying, operations and property directorates each had responsibilities for both brands, with the aim of creating synergies between the businesses. This however began to sap employee’s energy.

So to establish a more positive mindset, they created a balance whereby some functions remained centralised, whilst creating separate commercial brand business units, providing su�cient power in the Business Unit MDs, representing the customer. Within days of this move, the excitement amongst sta� and managers was palpable. The potential energy that had been suppressed for the previous few years was unleashed generating an immediate uptick in market share. So do be aware as to where you direct your energy.

...there is a true shift in what we call “primacy” in the business, which generates a meaningful shift in mindset and consequently behaviours

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1. “100 Practical Ways to Improve Customer Experience; Achieve end-to-end customer engagement in a multichannel world” by Martin Newman with Malcolm McDonald (2018) Kogan Page

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However all of this is just the start. Whether you shift the power to Business Unit MDs, or establish a CCO, they all signal a shift in power and energy. You then need to reinforce this shift by working on other available levers:

• Ensuring power resides with customer-accountable rather than product-accountable roles

• Establishing a target culture that is customer-obsessed, and then quantifying the gap you need to bridge (see ‘Mind the Culture Gap” article in the OE Cam journal “Digital Transformation”)

• Harnessing diverse mindsets (particularly top teams to avoid groupthink through team pro�ling and harnessing di�erence (see Hazel’s article on page 6)

• Designing a new organisation that embraces new technologies (see “Managing the Journey towards AI” article in the OE Cam journal “Explore the possibilities – Go on Safari”)

• Using communication and engagement to build an appetite to be braver, embrace risk and use design-thinking methodologies, as described in Julie Brophy’s article on page 12

• Encouraging the mindset to �lter down through the organisation using the habit loop to embed learning; forming habits through nudging – see Mariam’s article on page 16

• Embracing the mine of information that can be extracted by Data Scientists and Data Analysts. But ensure that the data is directed to ensure informed decisions are made for the customer, rather than getting lost in all the ways in which data can be used. Better to be customer-led and data-informed. Amazon is a great example of this.

Rewiring the organisational mindset can be hard, and needs some hard levers to make it happen. Shifting where the power lies at the top of the business is one place to start, that can trigger a change in behaviour further down the organisation. But it does need to be complemented with other levers to ensure the shift is sustainable.

[email protected]

A shift in mindset through a shift in primacy means in effect, a redirection of the corporate energy of the business, which can unleash either a positive or destructive energy, or just plain sap the energy out of the business

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by DR. HAZEL MCLAUGHLIN

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Harnessing Diverse Mindsets: the Challenges and the Opportunities

To gain competitive edge in today’s uncertain, volatile world, organisations need to be agile and encourage greater innovation by embracing diverse opinions. The big question is how to harness the strengths of diverse teams and create a mindset that makes the most of that diversity?

If we look across the globe, we �nd that diversity policies vary, and, in some instances, organisations take action for reasons of compliance rather than for a�rmative social action. This can have unintended consequences.

Simply recon�guring the combination of people within the Executive team creates an opportunity for change. However, the act of placing di�erent people into the team does not guarantee a mindshift. For example, the inclusion of a woman into a team, does not necessarily change the team dynamic. We know that team behaviours can be complex and that some teams work better together than others. Expectations and norms in behaviour have a role to play. It is important to understand the team interactions and to appreciate the power dynamics with the team. Who really holds the power and how can that power balance be shifted?

The Team Dynamic in ActionWhen we review the psychology behind diverse teams we �nd that the outcomes are a�ected by how information is processed and the way in which the social and power dynamic works; how people view each other in terms of like-mindedness, status, power and position. People often seek out people who are similar to themselves; not simply in terms of characteristics, but also in terms of identity, status, attitudes and beliefs. Indeed, when we look at the political environment, research indicates that people do not want to seek out alternative views and prefer to listen to others who reinforce their values and beliefs (1).

Some diverse teams use their di�erences to enhance team performance whereas others fail to do so (2). We need to go beyond gender or race and appreciate beliefs, values and mindset. If people in the team are too similar in outlook, they will make assumptions and may not challenge conventional practice. They may co-operate well, but this may not lead to performance improvement, new ideas or business success.

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There are a number of factors in play. To enhance team e�ectiveness, there are bene�ts to be gained from appreciating the value of di�erence and achieving a balance between identifying with others and recognising a di�erent perspective. One way to support change is conscious action to trigger a shift in mindset. However, even this might sometimes not be enough to change ways of thinking. Results count; when teams can see that they have better solutions and outcomes that reinforces di�erent behaviours.

When we think about team behaviours our focus is often on co-operation and working together. We encourage teams to collaborate, support each other and achieve the objectives (3). This is undoubtedly an important part of teamwork, but it is not the whole story.

Dangers of Groupthink Let us transport you into the typical (but hopefully fast-diminishing) Boardroom. What do you see? At its best we see professionals working together for the common good. But dig a little deeper. In the room sit similar people, often the majority, if not completely, are men in their 40’s and 50’s. There are maybe one or two women, but they are likely to be under-represented and few people from diverse or di�erent backgrounds. The Board can be relatively homogenous; people who have learned their craft in the same ways and with the same background. There can of course be disagreements and con�ict and people may see speci�c issues di�erently, but they agree on the fundamentals. There is a degree of comfort in this; others in the room are people like us, we can relate to them and build a relationship with them. And this is good news for getting things done. It can be fast and e�cient. There may be some debate but ultimately, the Board agrees on the core issues and can move on.

Continued overleaf...

But it is not that simple. There is danger in too much homogeneity; there is danger in groupthink.

A diverse mindset ultimately depends on the Executive perceptions of the group and their role within it. Co-operative mindsets are about setting ideal goals and exploring new ideas through sharing knowledge. On the other hand, adversarial mindsets, centre on protecting the status quo. In this case, the practical goals are about protecting existing knowledge, so leaders say, ‘this is the way we do things around here.’ It is about avoiding damage or risk rather than exploring possibilities. So ‘groupthink’ becomes a way to preserve the current ways of working. This can have a negative impact; teams do not respond quickly enough to external challenges or a homogenous board that allows a toxic culture to prevail. A recent example is Ted Baker where a mainly male Board did not challenge poor behaviour but let the CEO operate in an unacceptable way in this case when interacting with female sta�.

There is danger in too much homogeneity; there is danger in groupthink

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HARNESSING DIVERSE MINDSETS

Developing Diversity of ThoughtWe �nd in our practice that leadership teams may think they are open and responsive to new ideas but when we probe deeper they have unconscious biases and blind spots and therefore do not raise the uncomfortable issues. A Board, in particular should be deliberately non-homogenous, with di�erent stakeholder representation, requiring independent thinking and challenge.

Only by having more diversity of thought in the team, can groupthink be challenged. There is a distinct advantage for leaders who welcome diversity in teams and seek out others who can bring a di�erent perspective to issues. A good example of this is the use of reverse mentoring from the millennial generation who can often raise the uncomfortable truths – why do we do things in this way? Is there a better way?

There is a balance between gaining co-operation and buy-in versus challenging and analysing things from a di�erent perspective. Teams need enough cohesion to work well but also have enough challenge to take things to a di�erent level. This requires a level of safety and security for team members. People will not speak out if they feel that they will be ostracised or disrespected. There needs to be trust and openness that enables people to open up on the challenges, admit mistakes and look for better solutions for the future. Dissent can be uncomfortable, but it can also lead to a better solution overall; to the creation of new directions and opportunities. The team as a whole can be more innovative.

Building Diversity in Today’s World

Each organisation has its own approach to diversity but here are some fundamental ways to move forward:

Review how you attract people to your organisation; think diversity and inclusion when reviewing brand, attraction and reputation.

Adopt policies that encourage a wider range of people to be in your organisation; provide some �exibility to attract a broader range.

Ensure that the recruitment practices do not put o� certain people; be objective and focus on what you need in your organisation for people to succeed. Do not get too hung up on speci�c job details. Recruit for the best people who will work well in your organisation.

Develop a culture of openness and reward debate. Encourage people within the organisation to question and to seek out alternative approaches – this will result in better solutions.

Build teams that challenge and learn from mistakes. Mix and match across silos to enhance learning and develop an inclusive and learning based culture. Learn from mistakes quickly, experiment and move forward.

From a learning and development perspective, there is opportunity to enhance capability through coaching or workshops that challenge conventional thinking and develop an appetite for experimentation whilst mitigating risks.

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Diversity Mindsets in Practice: tips and hintsOE Cam has worked with a wide range of industry sectors and di�erent leadership teams. Our three top tips are:

Create an environment where people feel respected, valued and included.

Reinforce openness and provide scope to explore di�erent possibilities. There is danger in short-term quick �xes that go with the tried and tested solutions. Do not close down the debate too quickly or focus on “this is the way that we have done it in the past and it worked”

The world has changed and to gain a competitive edge embrace di�erence, seek out diversity in all its forms; it is not a numbers game but is about the mix and combination of people and ideas. Do not assume that women or di�erent groups will automatically bring diversity. If people are a lone voice, they will often not speak up. If the environment and norms do not welcome debate, then it will not happen. Diversity is about mindsets, culture and values and the way in which di�erent people are included.

Here are six ways in which OE Cam supports organisations to think di�erently:

Team pro�ling; harnessing di�erence but in a constructive way

Enabling leaders to bring out the ideas and strengths of their teams

Encouraging active listening and challenge through coaching and mentoring

Creative problem solving; enhancing decision-making within businesses

Harnessing the power of disruptive talent within teams

Creating a culture that values and develops diverse talent and values and rewards learning.

ConclusionWith diversity targets and high visibility around who organisations hire, promote and reward, the pressure is on for businesses to include di�erent people. But this is not a numbers game.

Diversity works when there is a change in the mindset and where inclusion is not lip-service. Diverse mindsets can enhance team performance and organisational success but having a range of di�erent people in a team is not enough. It is about how people are included within the team, how information is exchanged and whose views are valued and encouraged. There needs to be an environment that is safe for people to explore di�erent thinking and to build on diversity to bring out the best in everyone within the organisation.

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1. The Economist, Feb 20192. Van Knippenberg D, Van Ginkel WP and Homan AC (2013) Diversity

mindsets and the performance of diverse teams. Organizational Behavior and Human Decision Processes 121(2): 183–193

3. Hobman EV, Bordia P and Gallois C, (2003) Consequences of Felling Dissimiliar from others in a work team. Journal of Business and psychology, Vol17, No3, Spring 2003

[email protected]

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Always seeking to understand the customer and applying this understanding into actions and business direction

Curious about the behaviours and direction of other business sectors

Abreast of the bene�t and use of latest technology

Role-models best use of technology

Recognising and quickly acting on changes in the external environment

Fosters trust through fair and just decision makingShows self-awareness and comfort in own characteristicsRecognises and encourages utilisation of the strength of othersUtilises personal energy for business performance rather than personal gain or reputation

Asks questions to seek understanding

Open to experiences that foster learning, even if negative

Seeks and provides feedback

Aware of personal development needs and seeks to continue to grow as an individual

Recognises and delivers the optimum pace in order to deliver outcomes e�ectively

Balances:

Engaging and disruptive thinking

Emotion and logic for decision making

Long term focus with best practice in the present

Re�ection with immediate response

Focus and tenacity with change and innovation

EXTERNAL PERSPECTIVE AUTHENTICITY

CONTINUOUS LEARNING AMBI-DEXTROUS THINKING

THE AGILE LEADER

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Always seeking to understand the customer and applying this understanding into actions and business direction

Curious about the behaviours and direction of other business sectors

Abreast of the bene�t and use of latest technology

Role-models best use of technology

Recognising and quickly acting on changes in the external environment

Fosters trust through fair and just decision makingShows self-awareness and comfort in own characteristicsRecognises and encourages utilisation of the strength of othersUtilises personal energy for business performance rather than personal gain or reputation

Asks questions to seek understanding

Open to experiences that foster learning, even if negative

Seeks and provides feedback

Aware of personal development needs and seeks to continue to grow as an individual

Recognises and delivers the optimum pace in order to deliver outcomes e�ectively

Balances:

Engaging and disruptive thinking

Emotion and logic for decision making

Long term focus with best practice in the present

Re�ection with immediate response

Focus and tenacity with change and innovation

EXTERNAL PERSPECTIVE AUTHENTICITY

CONTINUOUS LEARNING AMBI-DEXTROUS THINKING

THE AGILE LEADER

I ssue 1 2019 Rewired: Evolving Mindsets1O

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Fosters trust through fair and just decision makingShows self-awareness and comfort in own characteristicsRecognises and encourages utilisation of the strength of othersUtilises personal energy for business performance rather than personal gain or reputation

Balances:

Engaging and disruptive thinking

Emotion and logic for decision making

Long term focus with best practice in the present

Re�ection with immediate response

Focus and tenacity with change and innovation

AUTHENTICITY

AMBI-DEXTROUS THINKING

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Fosters trust through fair and just decision makingShows self-awareness and comfort in own characteristicsRecognises and encourages utilisation of the strength of othersUtilises personal energy for business performance rather than personal gain or reputation

Balances:

Engaging and disruptive thinking

Emotion and logic for decision making

Long term focus with best practice in the present

Re�ection with immediate response

Focus and tenacity with change and innovation

AUTHENTICITY

AMBI-DEXTROUS THINKING

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by TONI MARSHALL

The Agile Leader: Developing an Agile Mindset

Agile leadership has gained particular interest in recent years. The OE Cam Agile Leadership model (shown left) outlines the fundamental components of an Agile Leader.

This leadership style incorporates the ability to adapt, continuously learn and fail fast. All of which are underpinning pillars of a growth mindset, outlined by Dweck’s* theory.

Mindset plays an important role in developing an Agile Leadership style, as it is a fundamental enabler (or blocker) of behavioural change. It is often deeply engrained into an individual’s cognitive processing and therefore requires some consideration of psychological in�uences to change it.

OE Cam helps organisations embed Agile Leadership into their teams utilising blended learning approaches:

• Workshops – exploring the core capabilities of Agile in a safe and engaging environment

• Serious play – a game allows us to address blockers to Agile Leadership and reach the subconscious aspects of mindset through ‘�ow’

• Online development - allows us to nudge behaviours forward, ensuring that new learning is engrained into strong synapses. Moving from ‘conscious competence’ to ‘subconscious competence’ (making the new learning the norm)

• Individual coaching, with a psychologist - ensures that the right questions are asked to really understand individual motives and drivers, identifying thinking traps that might derail development.

To learn more about OE Cam’s approach to Agile Leadership and Evolving Mindsets, please contact Toni Marshall.

1. “Mindset: The New Psychology of Success” by Carol Dweck (2007)

[email protected]

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by JULIE BROPHY

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Using Communication and Engagement to Nudge ‘Risk’ Mindset

A partner consultancy of ours recently told me the story of how they challenged a FTSE 100 leadership team to come up with a ‘ready to go’ online competitor business. In just 2 weeks they de�ned a compelling customer proposition, put together the �nancial business plan, spec’d out the technical platform, even designed the logo. Their own modelling showed that for a small investment they could create a very signi�cant new market…

However, the proposition wasn’t nurtured any further as, even though it would disrupt the market, it would also disrupt their current business model. In the end the organisation was not brave enough to consider launching the proposition.

Disrupt Yourself from the InsideThis is a really powerful illustration about the importance of having the right level of risk appetite.

By protecting their current revenue streams, the organisation has left itself open to a competitor coming up with a very similar business model. If this happens, rather than leading the market disruption the FTSE 100 company will be playing catch-up.

This article looks at how organisations can increase their appetite for risk in order to respond faster and more e�ectively to changes in the market, customers’ expectations, or as in the above case, take advantage of internally generated innovations.

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Need to Change the Risk Mindset

For organisations that have previously been more focussed on protecting revenue streams and market share, moving towards a customer centric, design thinking approach will require a change in the mindset of both leaders and employees.

Gary Ashton picks up on this in his article on page 2 with regards to how an organisation can start the mindset shift needed to be more customer centric, by introducing a Chief Customer O�cer or CXO and giving the customer a seat at the top table.

However, this alone is not enough. To continuously respond to customer needs and quickly adapt to the market, the whole organisation needs a di�erent way of working. A recent report concluded that “the biggest mindset shifts CEOs need to embrace, is the willingness to give employees the license to conduct rapid experimentation, and even fail if needed, in order to learn” (1).

The report also noted that to empower employees in this way an organisation’s culture needs to evolve so employees feel safe about taking risks and failing sometimes without fear of reprimand or embarrassment.

These conclusions give a clear direction for organisations: increase your appetite for risk to e�ectively compete in today’s market and be in a position to respond quickly to future changes.

Continued overleaf...

Using Design Thinking to Respond to ChangeIn our last journal, AI: Explore the Possibilities Go on Safari, we discussed how using a design thinking approach puts the customer at the centre of what the organisation does and helps them move quickly from business issue to solution.

For this to happen, leaders need to let go of the familiar way to launch a product/service based on having a fully designed product and a well-crafted business case that covers all eventualities. Instead they need to become comfortable with prototyping and fast failure. This essentially means putting a minimum viable product (MVP) into the marketplace and letting customers do the user testing in a real-world environment. To apply a design thinking approach, organisations needs to be braver and understand how to take calculated risks, which our example shows can be di�cult even when there is a strong �nancial case for doing so.

A low appetite for failure and risk-taking is a key cultural barrier to organisations being able to respond quickly and innovatively to customer expectations.

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USING COMMUNICATION AND ENGAGEMENT TO NUDGE ‘RISK’ MINDSET

If an organisation’s culture re�ects the view that risk is a thing to be minimised, employees will be socialised in that mindset, and have developed internal cognitions that re�ect this lack of risk appetite, ie. briefs opinions, values etc. They will exhibit the type of ‘risk adverse’ behaviour for which they have previously been rewarded by the organisation. Of course, it is worth noting that acceptable levels of risk are di�erent for every industry sector and organisation. For example, levels of risk in Air Tra�c Control are very di�erent to those in Retail.

This will not change overnight. Leaders cannot stand up in front employees and say “from now on we will take more risks!” and expect employees to believe the new message. Nor is there likely to be a ‘lightbulb’ moment where people suddenly realise there is a need for, and are able to make, a change in the way they think about risk. In which case, modifying mindsets so that the change can be accepted and sustained, will best be achieved by a process of ‘nudging’ people towards the new way of thinking.

Mariam Mirza’s article on page 16, discusses habits and how leaders can sustain and embed the mindset into the organisation’s culture by creating cues, routines and reward.

The Psychology Behind Nudging MindsetsThere are a variety of ways of achieving the desired outcome, but I believe two of the most e�ective levers leaders have at their disposal are communication and employee engagement. Before looking at how to use these levers we will look at the psychological theory that underpins the approach.

1. Communicating to Reframe RiskWhen confronted with new evidence or information that contradicts their beliefs, ideals or values, people are naturally driven to �nd a way to resolve the contradiction and reduce their mental discomfort. As the information is in the public domain (and therefore cannot be un-known) the individual has two options – they can either ignore it or adjust their internal mindset to accommodate it. The latter results in nudges to a person’s mindset. Organisations can start to achieve the change by communicating a new message that encourages experimentation and risk taking (at the appropriate level, not a free for all). The language needs to take on a more positive tone, so ‘risk’ is the chance to try something new and ‘failure’ becomes a useful learning opportunity. By talking about risk in a di�erent way, leaders will consciously start to shift employee mindset by introducing cognitive dissonance.

Employees should hear the new risk message frequently from leaders. The communication needs to be consistent and authentic from all sources, or employees will discredit the new information and resolve the dissonance without making the required mindset change.

Cognitive Dissonance is a theory �rst developed by Leon Festinger (2,3,4). His premise is that people seek to have consistency between their cognitions, between their beliefs, opinions, values, etc. We are comfortable when our cognitions align with the things we say, do and the information that we have to hand. Dissonance is the mental discomfort experienced by a person when there is misalignment. There are two main ways that the discomfort is generated:

1. People hold two or more contradictory beliefs, ideas or values

2. A person’s action or speech does not align with their cognitions.

The language needs to take on a more positive tone, so ‘risk’ is the chance to try something new and ‘failure’ becomes a useful learning opportunity

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1. Singapore Management University (2018). Cultural transformation in the digital world. Research Report

2. Festinger, L. (1957). A Theory of Cognitive Dissonance. California: Stanford University Press

3. Hamon-Jones, E. & Mills, J. (1999) An introduction to cognitive dissonance theory and an overview of current perspectives on the theory. American Psychological Association

4. Cooper, J. M. (2007) Cognitive Dissonance: Fifty Years of a Classic Theory. Sage

2. Engagement to Nudge Employee MindsetWhen a person’s behaviour or speech runs counter to their cognitions it results in dissonance. In both cases the fact that it has been externalised and observed by others, means it cannot be retracted. The only recourse left to the individual to resolve the discomfort caused by the contradiction is to change their internal cognition to incorporate the way they have spoken / acted – i.e. start to change their mindset.

The resolution of cognitive dissonance through engagement is a mainstay of Hollywood buddy movies. Two protagonists who start out hating one another, get into situations where they �nd out new information about the other or are forced to behave in a di�erent way. As if by magic, by the end of the movie they are �rm friends – they have managed the dissonance by adjusting their thoughts, values and beliefs which are once again consistent.

Organisations can use similar magic to engage employees in the new risk-embracing approach by metaphorically taking them on a ‘change of mindset road trip’. Providing opportunities to use prototyping and fast failure techniques will enable employees to try the new behaviour in a safe environment. For example, they can practise the desired new ways of working in small continuous improvement activities. Once employees have exhibited the new behaviour a number of times, they will need to adjust their internal cognitions to re-establish the balance between the new external world and their internal view.

This approach also gives the organisation a very tangible way to demonstrate that they are providing a supportive environment which encourages employees to take more calculated risks. It also reinforces the new language around risk, increasing the credibility of the message and reducing the likelihood that that employees can ignore the new information.

ConclusionTo be in a position to respond to change in their markets, customer expectations or to be a disruptor, organisations need to deliver new products and services faster and with a greater focus on customers. Design thinking with its fast failure method o�ers an approach that will help equip companies to respond e�ectively.

However, it often requires bravery and an increased risk appetite. These cultural changes will not occur overnight but can be achieved as a result of ‘nudging’ employees towards a new mindset. Using Festinger’s theory of cognitive dissonance we have shown how communication and engagement are two of the most e�ective levers an organisation and its leaders have to achieve the required change in mindset.

If you would like to talk to us about this, please contact Julie Brophy by emailing [email protected] or phone our Cambridge o�ce on +44 (0)1223 269009.

[email protected]

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I ssue 1 2019 Rewired: Evolving Mindsets

by MARIAM MIRZA

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Force of Habit

Let’s begin with a case study…

A renowned neurological case study that triggered neuroscientists to explore the realm of habits and unconsciousness was that of Mr Eugene Pauly. In 1992, Eugene had contracted viral encephalitis, which severely damaged a part of his brain called the medial temporal lobe. This meant that he could not recall old memories, form new ones and he was no longer able to e�ectively regulate his emotions.

To be closer to his daughter, he moved to a new house with his wife. Despite not being able to draw a layout of his house or explain how to get to a particular room, when he was hungry, Eugene was able to go to the kitchen and open a jar of nuts and he would go to the bathroom when he needed it. Naturally perplexed, neuroscientists did some further investigation…

Unfortunately, Eugene had not got his memory back. The research discovered that Eugene was relying on habits that had been stored in his basal ganglia - a non-damaged area of his brain (1).

What are Habits?A habit is an action or behaviour that you do so regularly and often that you do not consciously know you are doing it (1).

A habit is an action or behaviour that you do so regularly and often that you do not consciously know you are doing it...

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CUE

ROUTINEREWARD

To trigger you to carry out the action

The action itselfPositive outcome of completing the action

HABIT LOOP

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Let us take a very common example of a cue - the ergonomics of a door. Think about it, a handle indicates we need to pull whilst a �at surface indicates a push this right here, is the cue. The surface of the door lets us know what our next move is. Now, without even thinking, when we approach a door, we know exactly what to do! A habit has been formed – brain notices a handle or no handle (the cue), to push or pull the door (routine) going through the door without any issues (reward).

Habits can be good and bad. Some bad habits we often hear about are often related to our health i.e. smoking or biting our nails. Understanding how habits are created can help us develop new good habits and can encourage us to break bad habits or avoid developing bad habits all together!

Why is it Important to Set Habits?Take the example of driving a car. If we really think about it, the concept of driving a car is quite a daunting task. You are not only responsible for yourself but you are often responsible for getting passengers safely from A to B whilst taking into consideration other drivers, pedestrians, cyclists, knowing what to do at tra�c lights, roundabouts, driving at speed down a motorway etc. However, this is routine for so many of us. This routine is important because habits help conserve mental energy for when something out of the ordinary might happen i.e. an unexpected diversion. In the context of the workplace, habits and routines enable us to reserve cognitive resources for challenging situations and important decision-making processes.

A key part of OE Cam’s psychological approach to learning and development is to take full advantage of these processes and use them to embed learning. This is why our approach to learning adopts the principle of ‘The Habit Loop’.

The psychology behind habits is broken down into three steps:

1. Cue: to trigger you to carry out the action2. Routine: the action itself 3. Reward: positive outcome of completing that action

With this loop in place, over time these behaviours become routine.

Continued overleaf...

Diagram 1: The Habit Loop

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I ssue 1 2019 Rewired: Evolving Mindsets18

FORCE OF HABIT

CASE STUDYCreating a Habit Loop with Company X:

De�ne the reward - Firstly we crystallised what the individuals wanted to achieve from the development programme. With this particular organisation, the goal was to have the whole team working more e�ectively together. Keeping the habit loop in mind, the reward is the goal that the individual wants to achieve from the development.

Set the routine - Taking data from the 360 feedback review, we identi�ed the individuals’ strengths and areas of development. Using this information, we determined what behaviours/actions would maximise not only the individuals performance, but maximise the relationships of the people around them. Referring back to the habit loop, the routine is the set of actions/behaviours that should be carried out in order to achieve the reward.

Develop relevant cues - The 360 feedback data highlights which cues warrant a certain positive action. For example, “when morale is low in team meetings Joe Bloggs could do more to motivate the team.” Here the cue would be for Joe Bloggs to evaluate energy levels of his team when he chairs team meetings.

Creating Habit Loops at WorkTaking this approach, OE Cam works with people to proactively set this habit loop. We do this by:

1. Understanding what it is that the individual / team / organisation wants to achieve (desired reward)

2. Work with the individual/organisation to discuss and

set appropriate actions to be carried out in order to achieve the reward (routine)

3. Identifying and setting relevant cues so that positive behaviours will follow (cue)

For example, we recently applied this technique through a series of one-to-one 360 feedback sessions with a senior management team as part of a leadership development initiative. See box out right.

For us, forming habits is the key to embedding learning and implementing positive behaviour changes. But how can you consciously encourage new habits? In our experience habits are best formed through a technique called ‘nudging’.

With this loop in place, over time these behaviours become routine

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1. Study taken from “The Power of Habit” by Charles Duhigg (2013)

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What is nudging? Nudging is essentially giving an individual a prompted choice to carry out an action that acts in their best interest. Actions are usually nudged by relevant cues.

So, how do we take these nudging principles and apply them to the workplace?

The Power of the Push Noti�cationAs part of OE Cam’s blended learning approach, we have been able to use our interactive online platform to set bespoke habits for each individual taking part (either in a client bespoke programme or general learning programmes). This involves setting learning outcomes for the individual and these objectives being sent to the learner through an email reminder or a push noti�cation to their phone. For example, as part of a ‘developing team e�ectiveness’ module, learners were nudged to remember their team members’ information processing styles when speaking/writing to them. “Do they need the detail or just the bigger picture?” This reminder was pushed out to them once a day for one week.

Nudging in More Ways Than OneDo you often �nd that when you want to remember short pieces of information, whether it is a shopping list, the names of your colleague’s children or a phone number, we tend to repeat it a few times? This is because repetition takes the information from our short-term memory and moves it into our long-term memory store. The frequency of nudges helps to set positive behaviour as a habit.

Coaching sessions also adopt principles of nudging. One aspect of our 1-to-1 coaching sessions (which are tailored to an individual’s learning style) is to reinforce key messages by exploring how the new changes are being implemented, managing feelings of cognitive dissonance and asking key questions such as: “what is working well?” “what could be developed further?”.

Ensuring that the learning is embedded and maintained in all of our deliveries is key to our work. Therefore, it is important that we work with individuals to set the right habits and work with organisations to ensure that the right systems and processes are in place to support these habits in the longer term.

Maintaining Habits With a Habit Culture Building on Julie Brophy’s article on the psychology behind nudging mindsets, habits can and will be sustained long term if the organisation encourages a habit mindset. To reinforce the two points in Julie’s article:

1. The organisation must ensure communication around change is positive and encouraging of experimentation and risk taking.

2. Keep employees engaged in a risk-embracing approach through providing opportunities to make use of prototyping, fast failure techniques and setting and celebrating marginal gains.

If you are interested in understanding how to use the habit loop as part of changing employee mindset then please get in touch with OE Cam.

Let us nudge you in the right direction!

[email protected]

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Organisation E�ectiveness Cambridge (OE Cam LLP) is a specialist �rm of business psychologists and organisation consultants who maximise the e�ectiveness of individuals, teams and organisations.

We believe that organisational e�ectiveness can only be improved through tackling the ‘hard’ with the ‘soft’. We view your organisation from multiple perspectives – the behavioural, the structural, the cultural and the economic so that we get to the essence of your challenge and deliver bespoke, feasible and sustainable solutions.

Our clients span industry sectors and international boundaries and include: AB Foods; Arriva Trains; Body Shop; City & Guilds; The Coal Authority; Coller Capital; Costain, Department of Health; Goodwood; Greene King; Odeon Cinemas; Primark; Ryder; Solent NHS Trust; Spirax Sarco; Stonewater; Travis Perkins, University of Cambridge, Virgin Active and Yorkshire Water.

We see organisation e�ectiveness as a combination of organisation development and talent management:

Talent Management

• Executive Assessment• Leadership Development• Executive Coaching• Team E�ectiveness• Diversity & Inclusion

We are a boutique consultancy, which means that your experience with us will be a personal one. We will invest the e�ort to get to know you and your organisation to jointly deliver the outcome you are seeking. We are proud to be an employee-owned company.

For more information please visit www.oecam.com or call us on +44 (0)1223 269009.

Organisation Development

• Board E�ectiveness• Organisation Design• Change Management• Culture Change• Performance Management

I ssue 1 2019 Rewired: Evolving Mindsets2O

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Contributors

Martyn Sakol - Managing PartnerMartyn is a Chartered Psychologist and MBA, with over 20 years experience in leadership and management assessment and development across all sectors, both in the UK and internationally. The focus of his work is to maximise the e�ectiveness of individuals, trams and [email protected]

Gary Ashton - PartnerGary leads the Organisation Development practice. He consults in the re-design and implementation of organisation structures and management processes, post-merger integration, improvement of joint venture capability, inter-team e�ectiveness, and board and senior management team assessment and development. He has presented at seminars on organisation change, business partnerships and has led a Retail HR [email protected]

Hazel McLaughlin - PartnerHazel is an experienced Chartered Occupational Psychologist and leads OE Cam’s Talent Management practice. She has a passion for diversity & inclusion and specialises in leadership, change and business transformation. This includes Board level assessment, development programmes and executive coaching. She has held both Executive and NED Board positions and co-founder of the BPS Board E�ectiveness Group. She is a past Chair of BPS' Division of Occupational Psychology and Deputy Chair of its Professional Practice Board. She has published as an academic; has been the lead author on several BPS white papers and government consultations and an international invited [email protected]

Toni MarshallToni is an Occupational Psychology postgraduate who brings particular expertise in integrating current, commercially-focused research into her work at OE Cam. Toni specialises in individual and team development, particularly in feedback processes and creating business-focused development events. She is an active member of the CIPD and the British Psychological Society (including Division of Occupational Psychology). She is also BPS Level A & B [email protected]

Julie BrophyJulie Brophy is a highly experienced consultant working in OE Cam’s Organisation Development practice. She specialises in helping clients to improve the e�ectiveness of individuals, teams and organisations through re-designing and implementing organisation structures and management processes, post-merger integration and culture [email protected]

Mariam MirzaAs a Business Psychologist Consultant, Mariam designs and delivers training workshops on topics such as resilience, team work and coaching & mentoring. She has particular expertise in designing and implementing 360 degree feedback as well as pulse engagement surveys. Mariam also has a range of experience in using key psychometrics to drive forward individual development as well as selection and assessment. [email protected]

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